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Adaptive expectations
Suppose you flipped an honest coin 10 times and heads came up 8 times. You are about to toss the coin another 10 times. Using adaptive expectations, how many heads do you expect? Based on rational expectations, how many heads do you expect?
A firm has estimated the following demand function for its product: Calculate the advertising elasticity of demand and explain its meaning.
The U.S. government spends over $15.8 billion on its Food Stamp Program to provide millions of Americans with the means to purchase food.
Government needs to eliminate the gap by changing expenditures. What policy would you suggest.
Provide a report to management of the firm as to whether or not it should continue to operate at a loss?
At what price will she buy four visits? Eight visits? What is the elasticity of between a price of $5 and $6 per visit? Between a price of $29 and $31?
From this information, can you devise a general rule explaining how the Herfindahl-Hirschman index is affected when exactly two firms in the market merge? (Hint: compare a2 + b2 with (a + b) 2)
What is likely to happen to the number of gliders sold if Emerson follows company policy and raises the glider price to that calculated in part b?
Elucidate what have noticed is that there is a high demand for Louis Vuitton bags even though they are so expensive.
Calculate total factor productivity growth (our measure of technological progress) for each country using the growth accounting framework discussed in class.
the grocery store next door provide an offers to double coupon night for Senior Citizens.
Assume that there are two power generating plants that emit SO 2 (sulphur dioxide). In the absence of regulation they each emit 10 tons of pollution per month.
What is her marginal rate of substitution when L = 100 and she is on the budget line? What is her reservation wage? What is her optimal combination of C and L?
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